Earlier today, the major stock indexes were trading sharply lower. The highly followed SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) was trading down to the $122.82 level. This afternoon, the DIA is rallying off of the lows to $124.12 a share. This is still a very good intra-day bounce especially if you happen to be a scalp trader.
How can anyone tell if the markets are going inflate and trade higher? There is usually just one answer to that question and that is gold. When gold catches a bid higher despite the U.S. Dollar Index being strong on the trading session it will usually indicate that the stock markets are going to inflate and trade higher. Today, the SPDR Gold Trust (ETF) (NYSEARCA:GLD) traded as low as $148.84 a share around the lunchtime hour. Since that low print the GLD has rallied higher and is now trading around the $151.70 level. The Market Vectors Gold Miners ETF (NYSEARCA:GDX) is actually trading higher by 3.48 percent. This is a huge move for the gold mining stocks despite the U.S. Dollar Index rallying higher on the session.
Some other gold equities that are rallying higher today include the Deutsche Bank AG DB Gold Double Long ETN (NYSEARCA:DGP), Sprott Physical Silver Trust ETV (NYSEARCA:PSLV), and Yamana Gold Inc. (USA) (NYSE:AUY). All traders should also follow the U.S. Dollar Index closely as a pullback in the dollar will also help gold equities to rally higher. Gold is still the ultimate inflation indicator.
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The Ultimate Inflation Indicator
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